Power lithium battery industry leaders will eventually stand out

Multi-factor influence, industry concentration further increase

As a technology-and capital-intensive industry, with the improvement of end users 'performance requirements, the leading companies with more powerful technology will eventually stand out.

From the Chinese market perspective, BYD's shipments ranked first in 2016, reaching 7.35 GWh. The companies ranked next were Ningde era, Wotema, Guoxian Gaoke, etc.. The total market share of the top 10 companies reached 79.

In 2017, the Ningde era shipped more than BYD, reaching 9.72 GWh, accounting for 27 % of domestic power battery shipments. The total sales of the top three domestic power battery manufacturers(Ningde era, BYD, and Wotema) accounted for 55 % of the country's total sales, and the total sales of the top ten manufacturers accounted for more than 80 %.

According to the analysis of the market demand forecast and investment strategic planning report of the Power lithium battery Industry released by the Institute of Industrial Research, the changes in the concentration of the power battery industry in China from 2016 to 2017 show that the market share of the top three industries and the top five companies in the industry have declined. The industry's top 10 market share has risen, and the concentration of the power battery industry in 2017 has further increased.

In 2018, the concentration of the power battery industry in China is expected to increase further. There are three main reasons:

The first point is the law of R&D of new energy vehicles. Power batteries are the core of new energy vehicles and have a long certification cycle. Due to cost and technical considerations, lithium suppliers will hardly be replaced during the life cycle of models, and the market position of lithium battery companies is relatively stable.

The second point is the strategy of the car company and the power battery company. For the sake of technology and stability, car companies and related power battery companies through strategic cooperation or joint venture to build factories, in-depth binding. On May 4, 2017, SAIC Group established two new joint ventures through its wholly-owned subsidiary Shanghai Automobile Group Investment Management Co., Ltd. and Ningde Times, namely Time Power Battery Co., Ltd. and SAIC Power Battery System Co., Ltd..

The third point is the impact of state subsidies. In 2018, the subsidy policy further raised the energy density requirements of power batteries, highlighting the advantages and disadvantages of Fuqiang. On the other hand, as subsidies recede, the cost of new energy vehicles will fall, requiring power cell prices to fall further, while high-capacity power battery companies will have a higher price advantage.

Merger of industries intensified and the number of enterprises further decreased

The analysis of market demand forecast and investment strategic plan analysis of China's power lithium battery industry from 2018 to 2023 published by the forward-looking industry research institute concluded that behind the strengthening of industry concentration is the more brutal competition in the power battery industry, and mergers and integration will become a trend. In August 2017, Qiyuan Natagawa acquired Xingheng Power for 1.864 billion yuan; In December 2017, Yiwei Lithium proposed to acquire TCL's gold energy batteries with 73.59 million yuan; In March 2018, Changhong Energy acquired 270 million to buy Jiangsu Sanjie to enter the first phalanx of global battery manufacturing.

In 2015, there were 450 power battery supporting enterprises; In 2016, it was reduced to 240; There were only 96 in 2017 and a further reduction of half in 2018 is expected.

In the future, the market will be further concentrated on dominant companies. Only battery manufacturers with strong technological accumulation, sufficient capital support, rational market positioning, and rapid response to the market can take the lead and win the market.

The page contains the contents of the machine translation.